Loan Calculator

What actually drives the cost of a loan

Every loan is shaped by three numbers: the principal (how much you borrow), the interest rate, and the term (how long you take to repay). The monthly payment you see is the result of all three working together through the amortization formula.

The term is the one people underestimate. A longer term lowers the monthly payment, which feels easier, but it means more months of interest and a higher total cost. Two loans with the same monthly payment can cost very different amounts overall, so always look at the total interest, not just the monthly figure.

How to pay less interest

Because interest is charged on the balance you still owe, anything that lowers that balance sooner saves money. Borrowing less, making a larger down payment, or choosing the shortest term you can comfortably afford all cut the total interest.

If your loan allows overpayments, paying a little extra toward the principal each month is powerful: every extra dollar removes all the future interest that dollar would have accrued. Even small, occasional overpayments can shave months off the loan and save a surprising amount.

How is the monthly loan payment calculated?

It uses the amortization formula M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the principal, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments.

Does a longer loan term reduce my monthly payment?

Yes. Spreading the loan over more months lowers each monthly payment, but you pay more total interest over the life of the loan.

Is this loan calculator free and private?

Completely. There is no sign-up and every calculation happens locally in your browser, none of your figures are sent to a server.

Can I use it for a car or personal loan?

Yes. It works for any fixed-rate installment loan, car loans, personal loans, student loans or home improvement loans.